Friday, January 13, 2006

BushCo Trying to Manage Expectations on the Federal Deficit

A Bush administration official warned that the budget deficit could be as high as $400 billion this year, which hardly sounds like news given the alacrity with which BushCo has run our federal government deep into the red. But the Washington Post reports that they may be playing with the numbers to make the final figure look better:
But some budget analysts cautioned that the estimate should be considered more of a political mark to inform the coming budget debate than an economic forecast.
This is the third straight year in which the White House has summoned reporters well ahead of the official budget release to project a higher-than-anticipated deficit. In the past two years, when final deficit figures have come in at record or near-record levels, White House officials have boasted that they had made progress, since the final numbers were below estimates.
We all know it's common practice for political operatives to fudge polling numbers to try to make a final outcome look better by beating expectations. If a company tries that on Wall Street in order to later boast of beating expectations, analysts will eventually catch on that the earnings guidance is being used to try to boost the stock price. Give them credit for trying, since BushCo faces an uphill battle trying to make these numbers look good:
After four years of budget surpluses, the government fell back into a deficit in fiscal 2002, after which the deficit climbed to $378 billion in 2003 and $412 billion in 2004. In 2005, the tide of red ink receded to $319 billion.
For those who don't agree with Dick Cheney that deficits don't matter, that adds up to $1.5 trillion of federal debt that has to be financed, roughly $5,000 for every U.S. citizen.


Blogger jason said...

When the final numbers come out, I guess it is safe to assume that the docile press will cheer and say, "things are looking up."

7:46 AM, January 14, 2006  

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